Company formation for forex trading and paying taxes


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I do work with currencies trading (Forex), I do have Forex traders who trade with my capital, and it is increasing gradually.

What I want to do is to find a solution which allows me to run trading in best efficient way when it comes to taxes, etc.. also I will need to employ people (traders) in my company. Later on I would like to take some investments from other people to my company which will help to raise the capital and we could pay out the % based on profits made according to their invested amount. Does this require some license in order for others to allow to put money for investing ?

Offshore is a solution however it seems it is risky and I won't have a touch of money directly because 3rd parties will be involved in offshore. Also Cyprus results doesn't attract very much to offshore form right now... but may be I am wrong?

I need to know in which country (I prefer may be UK) it is best to run such business to save money on paying taxes, what type of form company (LTD or not..).

Thanks

Finance Legal Offshore

asked May 1 '13 at 23:38
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Trading Fx
1 point
Get up to $750K in working capital to finance your business: Clarify Capital Business Loans

2 Answers


1

Apparently I cant upvote Steve Jones answer, or comment on it, but I agree with what he says. Having spent the last 20 years working in financial firms (investment banks, brokers and prop traders), I can pretty much say that you'd need professional advice on this one. There are many regulations surrounding all types of trading (including FX trading) no matter where you are.

Also just because you incorporate a company offshore, doesn't mean it's going to save you any money. Where are you traders located? Are you employing them? Which markets are you trading? Government tax authorities will look at all these to determine if you are still liable for local taxes. You also run the risk of getting taxed twice (once where you are resident, and once where your company is based).

answered Jul 31 '13 at 01:35
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Steve
310 points

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In the UK there are a lot of regulations covering the handling of client monies, money laundering, accountability, etc, etc.

A UK Ltd company would be a fairly tax-efficient vehicle for this kind of business (corporation tax is relatively low, etc), although there are obviously tax-free offshore places where you can incorporate (BVI, etc).

I'm guessing you'll need some professional advice for this venture, as there are a lot of complexities.

answered May 2 '13 at 00:39
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Steve Jones
3,239 points
  • Thank you for the answer Steve. I was wondering if you know any good offshore areas which are stable and cheaper to extablish, for example Swiss is very expensive to establish offshore there. – Trading Fx 10 years ago
  • NZ (where I'm based) has a rather interesting trust structure where overseas income is not taxed. Cook islands is also sometimes used. The popular jurisdictions of Netherlands Antilles, Bermuda and BVI are getting a lot of attention as some in the US want to regulate the shadow financial system of repos. – Drllau 9 years ago

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